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Thursday, February 04, 2010

Hirschman's four interpretation of market society

The less you are, the less you manifest [äußerst] your life, the more you have, the greater is your divested [entäußertes] life, the more you accumulate on your alienated essence. Everything that the economist takes from you in terms of life and humanity, he substitutes it for you in terms of money and wealth, and everything that you can’t do, your money can do. It can eat, drink, go to the ball or the play, it knows art, learning, the historical curiosities, the political power, it can travel, it can assimilate all that for you; it can buy everything; it is true capability. But the thing that does all this may do nothing else than make itself, buy itself, for everything else is really its servant, and when I have the lord, then I have the servant and I don’t need its servant. All passions and acts must thus submit to greed. The worker must only have as much as he needs to live, and he must only want to live, in order to have.” – Marx, economic philosophical manuscript.

Albert Hirschman wrote a famous essay in the eighties entitled Rival Interpretations of Market Society, in which, like a structuralist pulling the motifs and variants out of a fairy tale, he delineated the four canonical interpretations of Market Society. Before he gets started, he notes that these interpretations all presume that the social order is justified in that it produces happiness. That notion, he claims, arose in the eighteenth century. He doesn’t say very much about how that notion arose or what humor or temperament justified the social order before that time – he merely supposes that before the rise of modernity, happiness was a matter of accident. My own story, as my readers know, is much more complicated and bears down harder on what ‘happiness’ as a total social fact is. However, I’m more interested in the way he generates the four canonical interpretations of Market society – and I should say, these interpretations are about the collective moral effect of market society.

The story, as Hirschman tells it, is that the eighteenth century philosophes discovered or created two themes. One theme was that happiness could be ‘engineered’ by changing the social order. This theme ‘arose at the same time as the idea of the unintended consequences of human action’. “The latter idea was taken to neutralize the former: it permitted one to argue that the best intended institutional changes might lead, via those unforeseen consequences, or ‘perverse effects’, to all kinds of disastrous results.”

This distinction isn’t novel, nor is the idea that the radical vein in modernity emphasized the engineering of happiness and the notion of perverse effects was used to argue for laissez faire. The latter, it should be noted, did not argue against the overriding idea that happiness was the ultimate test against which all social orders were to be judged. Rather, it viewed the market as the place where ancient oppression is annulled, our wants our satisfied, and we avoid the danger of investing power in those who would annul oppression merely as a prelude to the oppressions they themselves would then practice.

One of the unusual things about this quarrel, Hirschman thinks, is how little the two traditions communicate with each other. But be the ideologist a defender of the market or a critic, there have been in general four interpretations of the market. One of them – the earliest, the eighteenth century interpretation that Hirschman associates with Montesquieu and Hume – is the notion of doux commerces – gentle commerce. In essence, the effect of the market is to soften the warrior, to defuse the fanaticism of the priest, and to make us all concerned with at least the façade, or impression, of probity, honesty, and responsibility.
“There is here then the insistent thought that a society where the market assumes a central position for the satisfaction of human wants will produce not only con- siderable new wealth because of the divi- sion of labor and consequent technical progress, but would generate as a by-prod- uct, or external economy, a more "pol- ished" human type-more honest, relia- ble, orderly, and disciplined, as well as more friendly and helpful, ever ready to find solutions to conflicts and a middle ground for opposed opinions. Such a type will in turn greatly facilitate the smooth functioning of the market. In sum, according to this line of reasoning, capitalism which in its early phases led a rather shaky existence, having to contend with a host of pre-capitalist mentalities left behind by the feudal and other "rude and barbarous" epochs, would create, in the course of time and through the very practice of trade and industry, a set of compatible psychological attitudes and moral disposi- tions, that are both desirable in them- selves and conducive to the further expansion of the system. And at certain epochs, the speed and vigor displayed by that expansion lent considerable plausibility to the conjecture.”

Countering this, there is the assumption that a mastering greed will annihilate all traditional bonds, and with them the very anchors of morality. Hirschman believes that Marx – while not dwelling on this – certainly evokes it in the Communist Manifesto.

… capitalism corrodes all traditional values and institutions such as love, family, and patriotism. Ev- erything was passing into commerce, all social bonds were dissolved through money. This perception is by no means original with Marx. Over a century earlier it was the essence of the conservative re- action to the advance of market society, voiced during the 1730s in England by the opponents of Walpole and Whig rule, such as Bolingbroke and his circle (Hirsch- man, 1977, pp. 55-56). The theme was taken up again, from the early nineteenth century on, by the romantic and conserva- tive critics of the Industrial Revolution. Coleridge, for example, wrote in 1817 that the "true seat and sources" of the "existing distress" are to be found in the "Over- balance of the Commercial Spirit" in rela- tion to "natural counter-forces" such as the "ancient feelings of rank and ancestry" (1972, pp. 169-70).

This corrosion does not only dissolve morality, but ultimately dissolves the market society itself. Probity becomes a mask, behind which anything can be justified for gain’s sake. Of course, there are various ways this can be read. The recent moral panic about people leaving their overpriced houses and walking on their mortgage is one reading – the corruption of the oligarchs has now reached down into the populace itself. Schumpeter was certain that the wealth that could be taxed and redistributed as social welfare would create lazy and spoiled dependents on the system. Although Hirschman does not include this in his overview, what this interpretation is really about is the death of sacrifice, which no longer has any foundation in a society in which success is judged strictly in terms of gain.

Another interpretation, which also emerges in Marx, is just the opposite. It isn’t the bourgeois revolution that lends the market society a corrupt taint, but just the opposite: its weakness. Its failure to liquidate feudal remnants. Here, Hirschman mentions Arno Mayer’s The Persistence of the Feudal regime. Marx, of course, diagnosed Germany’s problem not only in terms of the exploitation endemic to capitalism, but the feudal relics that added another layer of oppression on top of that, and made it so much the harder to organize the proletariat. Hirschman calls this the Feudal Shackles thesis.

And, finally, there is the lack of Feudal Shackles thesis. This is, for instance, Louis Harz’s interpretation of American history. Because there was no saving Feudal pull, Americans never developed a strong sense of public wealth – it was always private wealth that counted for them. Hence, the impossibility of rooting European style social welfare programs in American soil.

I like this fourfold picture. I think it looks much different, however, once you posit that the triumph of happiness as both a total social fact and the ultimate legitimating term for the social order was always contested and always ambiguous. From this point of view, those stories look a bit different.

ps - it occurs to me that Derrida's convocation of the spectral logic in Marx plays within the framework of the narrative opposition between Feudal Shackles, on the one hand, and the lack of Feudal Shackles, on the other, which are in turn oriented towards the thesis of doux commerce or of the self-subversion of the market society. The history of the human limit that I've been following with all the attention to linearity of a drunk beatle includes a section on the war against superstition - I'll find some of my posts on that later. The reason that this is an issue at all when trying to understand the happiness culture becomes more obvious once we start to think of Marx's ghosts as important figures in his entire work, where they become the totems of temporality.

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